The cryptocurrency market has been quiet for the larger coins over the last 24 hours.
Ethereum (ETH) has increased by 2.5% while other popular digital assets like Cardano (ADA) have dropped by 1%.
Smaller projects, such as Decentraland (MANA), have seen a massive increase in price, rising 17% over the last 24 hours.
OMG has experienced a fall of 2.6% overnight. It currently sits at number 96 on CoinMarketCap (CMC) with a circulating market cap of $664m. Interestingly, the community is feeling slightly bullish with 70% of the votes on CMC siding towards an anticipated price increase. However, it should be taken with a pinch of salt, as there are no figures on how many people have voted.
OMG/USD price movement over the last 48 hours
OMG has started to climb back upwards again reclaiming key supports at $3.90 and $4.45 respectively. Furthermore, the moving averages (MAs) have once again shown a bullish signal with the shorter period MA crossing over the longer period MA.
Since a lot of the smaller coins follow BTC, if BTC was to increase, it could be expected that OMG would be quick to follow. The main area of interest would be around $4.75 resistance where price tested that area three times before being rejected.
It can be expected that if the price were to reach that resistance again (accompanied by an increase in volume), it would soon break, and OMG would climb to the upside.
OMG/USD 4-hour chart: Weakening momentum may lead to a collapse
Whilst the shorter timeframe charts are bullish, the longer timeframe charts say the opposite. The 50 period MA and price both remain below the 200 period MA which provides an immediate bearish outlook.
OMG is also conforming into an upwards wedge which historically has been a bearish price action signal. It signifies that buyers in the market are beginning to become exhausted, and sellers are starting to take control.
Furthermore, the RSI indicator is also showing bearish divergence making lower highs while the price action fails to do the same. The important area of interest remains at $4.75 which, if tested, could ignite a powerful reversal back down and break the $4.45 support.
If this level does not hold, the next area of interest would be $4 where buyers have previously shown a desire to purchase in large quantities.
Conclusion
Since OMG is a smaller coin it will follow BTC whichever way it moves. Therefore, if BTC starts to show signs of weakness, then OMG can be expected to break down and vice versa.
If BTC holds steady at its current levels, a short term increase can be expected with OMG testing its resistance near $4.75. The long term outlook for OMG remains bearish with two targets of $4.45 and $4 respectively.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.